(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
FOR A CHANGE GOLD FALLS IN EUROPEAN TRADING
April 12, 2013
For the last two years, vast majority of big moves in gold have been the result of the battle between the momo crowd and Smart Money in North America. So far today has been different. There is aggressive selling coming from Europe.
The selling may have something to do with Cyprus’ decision to sell excess gold reserves.
Core Producer Price Index (PPI) was a little hotter than expectations, it came at 0.2% vs 0.1%. This number should have been supportive of higher gold prices but selling from Europe has continued unabated.
Gold futures are at $1535, silver futures are at $26.96, and oil futures are $92.02.
S&P 500 resistance level is 1600; support levels are 1575, 1570, and 1565.
DJIA futures are down 42 points.
TURN IN AN IMPORTANT LEADING INDICATOR
April 11, 2013
Our models are adaptive, i.e., they automatically change with market conditions. This is accomplished by changing the weights of various factors that go into the models. At present, Weekly Initial Unemployment Claims in the U.S. carry a heavy weight. After two weeks of deterioration, the data this morning was positive. Initial claims fell to 346,000 compared to consensus of 365,000.
It is not clear how the market will react to this data. The theory behind the up move over the last four days has been that economic data was deteriorating and therefore the Fed will continue QE longer.
Gold futures are at $1558, silver futures are at $27.54, and oil futures are $94.33.
S&P 500 resistance level is 1600; support levels are 1575, 1570, and 1565.
DJIA futures are up 9 points.
STRAIGHT SHOT TO THE MOON
April 10, 2013
Those buying the broad stock market aggressively right here have to believe that there is a straight shot to the moon. Our 30 years of experience in the markets have taught us that trees do not grow to the sky.
Overnight China released data showing exports increased 10% in March month over month and imports increased 14.1%. Indeed the data is impressive, but in our view is unreliable as it does not jive with the rest of the data from China we are seeing.
FOMC minutes will be released at 2:00 PM ET. We will be carefully watching for signs of increasing dissension regarding QE. At times in the past FOMC minutes have been a trigger for a major move in the markets. However it is worth noting that the stock market is in the mode where bad news is good news and marginally good news is great news.
Gold futures are at $1580, silver futures are at $27.68, and oil futures are $93.84.
S&P 500 resistance levels are 1570, 1575, and 1600; support levels are 1558, 1550, and 1537.
DJIA futures are up 46 points.
NASCENT BUDS IN BEATEN DOWN COMMODITY STOCKS
April 9, 2013
Every morning we carefully review the overnight trading data from Asia and Europe.
As the stock markets have rallied, commodity stocks have been incessantly beaten down. This is the second time in the last two weeks that we are seeing nascent buds in commodity stocks. There is no macro economic data to support this move. More likely than not, it is the return of the age-old reversion to mean strategy by some large institutions.
Reversion to mean strategy simply means that most asset classes sooner or later revert to the mean. since commodity stocks have been beaten down and stock markets have gone up, reversion to mean simply means that commodity stocks should be the next leaders. If the trend persists, there will be significant opportunities on the long side in these beaten down stocks. Conversely there will be numerous opportunities on the short side in the stocks of the companies that have benefited from lower commodity prices.
Please stay tuned to the Real Time Feeds.
Gold futures are at $1575, silver futures are at $27.36, and oil futures are $93.23.
S&P 500 resistance levels are 1565, 1570, and 1575; support levels are 1558, 1550, and 1537.
DJIA futures are up 15 points.
QUIET MONDAY MORNING
April 8, 2013
Quiet Monday morning in trading.
Earnings season starts today with Alcoa reporting after the close. Our early estimates are lower than the bullish estimates on the Street.
We will be carefully watching earnings as they will provide many opportunities.
Gold futures are at $1573, silver futures are at $27.16, and oil futures are $93.02.
S&P 500 resistance levels are 1558, 1565, and 1570; support levels are 1537, 1530, and 1517.
DJIA futures are up 15 points.
